New city, Saudi Arabia

Saudis to create £500bn city in the desert

Saudi Arabia has unveiled plans for a new mega-city powered entirely by green energy as it looks to diversify its economy away from oil

Saudi Arabia has hugely ambitious plans to build a new $500 billion metropolis that spans three countries and will cover 26,500 sq km of totally untouched land.

The development, called NEOM, (which stands for new future) was announced at the Future Investment Initiative conference in Riyadh on 24.10.17 by Saudi Crown Prince Mohammed bin Salman. It's the latest in a series of mega projects designed to reshape the kingdom's economy that will provide a host of opportunities for architects and engineers.

"We try to work only with the dreamers," the young crown prince told investors gathered in the country’s capital, Riyadh. "This place is not for conventional people or companies."

According to CNN, the new city which will have its own laws, will be powered entirely by regenerative energy, while also making use of automated driving technology and passenger drones. It will span Saudi Arabia, Egypt and Jordan along the Red Sea coastline.

"All services and processes in NEOM will be 100% fully automated, with the goal of becoming the most efficient destination in the world," the Saudi Arabia Public Investment Fund said in a statement.

The project will be backed by $500bn from the Saudi government and its investment fund, as well as local and international investors.

It has caught the attention of foreign investors including SoftBank (SFTBF) founder Masayoshi Son and Blackstone CEO Stephen Schwarzman, who joined the crown prince on a panel dedicated to the project.

"NEOM is a fantastic opportunity," Son said on Tuesday. "In the beginning, I didn't understand. But when I visited the location, I said 'Wow.' "

Son said his Softbank Vision Fund, which counts Saudi Arabia as its biggest investor, would put money toward the new project.

The crown prince said there no set timeline for the development.

"This is a challenge," he said. "We know this takes time ... we are under pressure to deliver something new and to give innovative ideas."

Saudi Arabia has made a string of big announcements recently that are aimed at diversifying its economy away from oil.

The country said in September that it would pump almost $3bn into its entertainment industry.

In August, it launched a tourism project that consists of 100 miles of sandy coastline and a lagoon with 50 islands. The project even caught the eye of billionaire Richard Branson.

A year and a half into the efforts, officials have made progress on some parts of the broader plan -- known as Vision 2030 -- but also flip-flopped on others.

The government has cut some subsidies, announced new taxes and lifted a controversial ban on women driving. It also tapped global bond markets three times in less than a year, borrowing billions to balance its books.